The most effective way to prevent the student loan system from getting worse is by providing student debt relief.
Federal and state governments are to be blamed for the current student debt crisis.
State governments spend less on higher education, which transfers the financial burden to students and families. At the federal level, the Pell Grant, also known as the federal money given to college students by the government, is in shambles. This is because it currently pays less than 30 percent but it used to alleviate more than three-fourths of the typical college tuition cost, according to U.S News & World Report.
As of March 2023, 43.8 million Americans carry a hefty amount of $1.78 trillion in federal and student loan debt, according to an American personal finance company called NerdWallet. This stunts not only their futures but the nation’s economy as well.
The nation’s economy is affected because these 43.8 million Americans are also consumers and this debt crisis compels them to cut back on spending to conserve money. Fewer startups are also established due to this.
11.5 percent of Americans who live in the United States undergo destitution as of 2022, according to the United States Census Bureau.
There is still hope because 5.2 million Americans can be lifted out of poverty if student loan debt is forgiven, according to a non-profit organization that helps people who undergo destitution called Golden State Opportunity. Students can create new businesses and use their businesses to create new job opportunities.
Debt has caused 53% of high student debt loan borrowers to experience depression and one in 15 student loan borrowers have considered suicide, according to a survey from a financial coaching company called Student Loan Planner.
This data is present because students experience a heavy amount of stress. This stress can be from their school work, which is in addition to their stress from loan debt. Some of these students also have to worry about their part-time jobs.
At this rate, the national student debt will rise even more and leave the country with less economic development. Now would be the ideal time to provide debt relief for students and the future.
